JWR,

"P/E10 does not go away entirely, even with dividend strategies. It helps you assess the likelihood of more favorable stock prices (and better dividend yields)."

A few questions, for my own understanding of P/E10.

As I understand it, you would use P/E10, of the market as a whole (market cap weighted) to determine the valuation (good or bad) of equities, in general.  For example, the P/E10 of the S&P500.  Based upon this, you would set your portfolio asset allocation.

1) Would/could you not compare the P/E10 of some fund, rather then the market, as a whole, to determine whether or not to invest in that particular fund?  For example, if the P/E10 of that fund was at 11, while that of the market was 22, one indicator would say light on equity, while the other would indicate exactly the opposite, for that particular fund?

2) What about the P/E10 of individual stocks (same question as 1?)

3) If P/E10 of individual stocks and funds is significant (see 1 & 2), does that mean the average investors has to pour through historical data and annual reports to come up with this number?  That is, how good is current P/E, by itself, as an indicator for an individual stock/fund?

4) How important is P/E10, per your definition, compared to the average P/E over the last 10 years?  That is, I understand the difference in the calculation, as you explained it.  I'm wondering how a simple test (of the current P/E of a stock/fund, compared to it's average over some time period, is predictive of future share price behavior).  Or even current P/E compared to P/E10, for that stock or fund.

5) Are there any guidelines, for something similar to P/E10, on the debt side of one's portfolio?

6) Finally, wouldn't the P/E, or P/E10, of of one's portfolio, rather then the market, as a whole, or any specific stock/fund, be more indicative of the future performance of one's portfolio, specifically with respect to portfolio survivability during retirement?  This gets into asset allocation.  For example, P/E10 might indicate 30% equity (valuation based), but I might choose 4 funds/stocks, whose average P/E10 might indicate 60% equity?

I realize these questions may already be answered somewhere on your website but, being retired, I've forgotton how to do any real work, including searching for answers! 8-))